Talk:Junkyard Planet (Book)

◆ Introduction

The global recycling industry turns over as much as $500 billion annually—roughly equal to the GDP of Norway—and employs more people than any other industry on the planet except agriculture.

Wire insulation isn’t the highest quality plastic, but it’s good enough to make simple products like … slipper soles! These days, the biggest customers for Raymond’s Christmas tree insulation are slipper sole manufacturers.

There are few moral certainties here, but there is a guarantee: if what you toss into your recycling bin can be used in some way, the international scrap recycling business will manage to deliver it to the person or company who can do so most profitably.

as of 2012, fast-growing China accounted for 43.1 percent of total global copper demand. Meanwhile, the slow-growth United States accounted for only 8.5 percent.

In 2012, the United States recycled nearly 11.9 million cars (a down year, due to a weak economy and Americans holding on to their cars longer)

only fifty years ago, automobiles were almost impossible to recycle, and as a result millions of abandoned car bodies cluttered and polluted American cities and the U.S. countryside. Collectively, they formed one of the most serious environmental crises in the United States—and then, due to a scrapyard innovation, the problem was solved.

◆ 1. Making Soup

But if you’re looking for a consistent job, with benefits, where layoffs are almost unknown, then it doesn’t get much more consistent than American recycling. In Houston, a town that knows the heartbreak of boom and bust better than most areas, a stable job like that is worth more than just salary

For example, Americans consume 653.62 pounds of paper per capita per year, while Chinese consume 98.34 pounds, and Indians, on average, consume an unimaginably paltry 18.7 pounds.

◆ 2. Grubbing

During the first half of the twentieth century the rag trade was so big that it had its own trade journals, and served as a last-resort industry for those unable to do much else.

In fact, according to one survey, by 1900 24.5 percent of New York’s Jews were active in some facet of the junk trade.

◆ 3. Honey, Barley

How do a buyer and seller agree on a deal for a ton of old cotton rags, if every ton of cotton rags is different? The answer, first formulated by the National Association of Waste Material Dealers (NAWMD) in 1914, was to create binding specifications that said precisely what those rags should look like. If the rags, when delivered to the buyer, differed from that specification, the buyer would have grounds for a complaint, arbitration, or lawsuit.

Thus, in the scrap industry, there’s an axiom: it’s hard to buy scrap, and easy to sell it.

◆ 4. The Intercontinental

In Afghanistan, the Aynak mine threatens ancient Buddhist sculptures. In Burma, a copper mine run by the Chinese military is destroying ancient farmland and causing mass protests.

in 1980, 22 percent of China’s copper production was fed by scrap metal. By 1990 that number had risen to 38 percent, and by 2000 it had reached 74 percent.

◆ 5. The Backhaul

In early summer 2012, for example, the price of shipping a 40,000-pound container from Los Angeles to Yantian was a paltry $600. Going from Yantian to Los Angeles, however, could cost four times as much.

in 2012, American recycling companies harvested 46.35 million tons of old newspapers, magazines, office paper, and boxes—four times the amount they generated of scrap plastic, copper, aluminum, lead, zinc, and electronics, combined.

The difference in price between the two legs of the round trip varies by the ship, the time of year, and the port. But the critical fact for American scrap companies competing against Chinese companies is that the price of shipping to China is typically cheaper than shipping between geographically distant U.S. cities.

used beer and soda cans (used beverage containers or UBCs, in industry parlance)

The price of shipping a pound of cans across the Rocky Mountains to a company that can remelt them into new cans is around 7.5 cents per pound—or roughly $3,000 for 40,000 pounds. But on the West Coast, at least, shipping to China via a giant cargo ship is much cheaper: around 1.5 cents per pound, according to Alan. In other words, that same 40,000 pounds can be shipped to Shanghai for $600—or $2,400 less than it costs to truck it over the Rockies.

But what about India? Why isn’t it, and not China, the leading importer of scrap metal from the United States? On the high end, India’s scrap laborers make perhaps $80 per month compared to the $250 per month that the cheapest of Chinese scrap laborers make. Equally important, India is home to a growing array of manufacturers in need of metal, including automobile makers. But despite all of those apparent advantages, India’s scrap-metal imports from the United States are a fraction of China’s. Why? Howard leans back in his chair and tells me that, among the early office jobs he held before traveling abroad for Alpert & Alpert, one of the more educational was in the company’s Traffic Department. It’s an uninspiring name for what is the second biggest scrap-related expense—after scrap—at Alpert & Alpert: shipping. And it was in the Traffic Department, Howard tells me, that he learned a very important lesson about how and why scrap of any kind—metal, paper, plastic—flows to its final destination: “Scrap is gonna go to the place where the labor is cheap. That is correct. But if the labor’s really cheap in India, and it’s seven cents per pound to ship it to India, and it’s two cents per pound to ship it to China—you know, unless the price is a whole lot better in India, it’s going to China.”

So, no surprise, the top export, by volume, from Dubai to India is scrap paper and metal. Depending on the time of year, the cost of a backhaul to India can be as little as $200, and the time of passage can be as little as three days.

“There are fourteen factories in Jamnagar making tire valves!” he yells over the clatter. “The most in the world!”

◆ 6. The Grimy Boomtown Heat

“I have a customer who tells me that Yiwu, a manufacturing hub outside of Taizhou, needs five hundred tons of brass every month to make pins for lighters.”

Thus, as recently as the late 1980s, American electric motors were all but worthless—in North America. Oftentimes Chinese scrap traders could have them for free (while the American scrapyards that gave them away laughed at those allegedly foolish Chinese). Then they’d ship them to China, refurbish and reuse what the Americans didn’t repair, and pay workers $50 per month to break apart the ones that couldn’t be fixed. The remaining copper was sold for prices that, in those days, started around $1. Think about that: in the 1980s you could obtain, for free, something potentially worth over $10,000 the moment it hit Chinese shores.

◆ 9. Plastic Land

Wen’an County is at the heart of the global scrap-plastics trade.

◆ 10. The Reincarnation Department

the roughly 14 million American automobiles that are junked annually.

◆ 11. The Golden Ingot

25 percent of the hard drives sent for recycling and refurbishment in the United States have been used less than 500 hours.

in 2006 the U.S. Geological Survey estimated that Americans were throwing away 130 million cell phones per year—with each ton of phones containing ten ounces of gold. That may not seem like much, but it’s far more gold than you’ll find in a ton of even high-grade ore.

India’s electronics recyclers export vast amounts of precious metal bearing electronic scrap to refiners in Belgium for the same reason: high-tech refiners can make more from—and thus will pay more money for—computer chips extracted in developing world workshops.

◆ 12. The Coin Tower

According to Jack, an average junked U.S. automobile contains $1.65 in loose change when it’s shredded.

In 1986, after an intensive and expensive research program, Huron Valley opened a facility that used a mind-boggling combination of eddy currents and image recognition devices to turn a bin of mixed heavies into individual bins of pure copper, brass, stainless steel, and zinc (image recognition - in 1986)

In other words, if the Chinese government ever decides that it’d like to put an end to the hand sorting of scrap metal, the quickest route to accomplishing that goal would be to abolish import duties on mixed metals. (what? unsound logic?)

By 2000, in fact, only one copper refinery was left in North America—a situation that persists.

◆ 13. Hot Metal Flows

as a raw material, scrap is highly sensitive to perturbations in the global economy. If manufacturers aren’t manufacturing, the scrap dealers are among the first to feel it. Indeed, scrap prices began to slip as much as six months ahead of the Lehman crash. Likewise, if an economy is starting to grow, scrap prices tend to be among the first rising indicators (when Alan Greenspan was the chairman of the Federal Reserve Bank, scrap prices were among his favorite economic indicators).

the bullet casings and other remains of the wars that occur within and around it (so-called conflict scrap, and surely somebody must do it, so why not Sharif?)

◆ 15. Ashes to Ashes, Junk to Junk

In the first, researchers asked study participants to evaluate a new product—in this case, scissors—by cutting up paper in various, preordained configurations. Half of the study participants did the evaluation in the presence of a trash bin, only, and half did it in the presence of a trash bin and a recycling bin. The results were troubling: those who performed the task in the presence of a recycling bin used twice as much paper as those who could only throw their excess paper in a trash bin. “This suggests that the addition of a recycling option can lead to increased resource usage,” wrote the authors, Jesse Catlin and Yitong Wang.